Holes in perfect NFT bubble begin to appear as OpenSea caught up in controversy

The creation and sale of NFTs (non-fungible tokens) has taken the world of mainstream technology by storm, particularly over the course of the last year. 

Despite the abundance of hype that surrounds NFTs, there are a number of skeptics who question the cult-like following they have garnered. Dan Olson of Folding Ideas is one such critic, and in a two hour deep-dive video, he argues the entire NFT system is reliant on hype, optimism, and the potential for new investors.

Other more specific issues with respect to NFTs have come to light recently as well, such as a number of controversies linked to OpenSea, the largest NFT marketplace. 

The most recent controversy arose in relation to the platform’s free minting tool. At first, the free minting tool was available to users without any restrictions, and then in late January of this year, OpenSea suddenly introduced a limit of five collections and 50 items per collection made.

The sudden and unexpected change was met with harsh criticism online by the OpenSea community of users, who voiced that the tool was used as a means of not having to pay a ‘gas fee’, which is a term that refers to the fee that cryptocurrency miners charge users to write data onto the blockchain for them.

In response to the backlash, OpenSea reversed their decision and undid the limit just one day later, but shed light on why they had suddenly introduced the limit in the first place: wide misuse and fraud. 

Essentially, after the introduction of the free minting tool, OpenSea observed that more than 80% of the items created using the feature were plagiarised works, sham collections, and spam. 

Since the reversal of their decision to introduce a cap, it is unclear how OpenSea plans to address the broad misuse of the feature, which then raises questions of viability and integrity. 

Complaints by artists and photographers about the platform’s poor protection of their work and their interests certainly isn’t new, but given the strong backlash OpenSea faced in response to their efforts to introduce some sort protection to limiting fraudulent activity on their platform, there doesn’t appear to be a clear path forward for the company to address these issues. 

 

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